Antimonopoly Committee of Ukraine issues guidelines on state aid
Gulliver Business Center 1-A, Sportyvna sq. Kyiv 01601, Ukraine Tel. (38) 044 394 9040
STATE AID: overview
Beneficiary is an undertaking
State resources involved
Prior approval of the AMC is
Beneficiary gets an advantage that it could not normally get from the market
Potential distortion of competition
except de minimis ones not exceeding EUR 200,000 per undertaking over a
period of three fiscal years*
Forms of state aid**
10 years 10-year limitation period
Subsidies & grants
Reduction of financial liabilities towards the funds of statutory social
Sale of goods and services to undertakings at
below-market prices OR purchase from
undertakings of goods and services at higher than market price
Sale of state property at below-market
*Three-year period starts from 2 August 2017 **The Law does not provide an exhaustive list of state aid forms
Increase of state shareholding in the share capital of an undertaking
OR increase in the value of the state shareholding on terms not acceptable to
private investors etc.
STATE AID LAW IS NOT APPLIED TO...
Agriculture sector, fishing industry, production of
weapons for the purposes of the Ukrainian Armed Forces, law-enforcement authorities, State Transport Service etc.
Commercial activity related to services of the public interest*
Commercial activity related to investment in
infrastructure through public procurement**
*The list of such services shall be approved by the Cabinet of Ministers of Ukraine.
The following criteria should be applied:
clearly defined terms of public service obligations
the compensation does not exceed what is necessary to cover all or part of the costs incurred when providing public services
compensation conditions should be established beforehand in an objective and transparent manner
the undertaking should be chosen in a public procurement procedure
** State Aid Law is applied to commercial activity related to investment in infrastructure through public procurement if a tender procedure is...
Tender bidders are NOT equally and duly
NOT sufficient time for interested bidders
NOT transparent selection and award
Discriminatory treatment of
NO access to information
STATE AID IS PROVIDED BY...
Bodies of Administrative Service Office
State enterprise acting on behalf of state*
If there is a number of state aid grantors, JOINT NOTICE shall be filed with the AMC.
*Support granted by a state enterprise is not state aid by default. The following criteria must be met:
no state aid can be granted without due regard to the state authority's requirements
the state enterprise takes into account the state authorities'
there is integration of the state
enterprise into state administration
the legal status of state
the level of state
authorities' control etc.
Violation of State Aid Legislation
Misuse of aid
Recovery of state aid already paid out
How to resist against unlawful aid or misuse of aid? An interested party can...
... submit a formal complaint to the AMC
... ask the AMC to suspend the state aid measure if it affects or may affect competition
State support of legal monopolies is not state aid if all tests are met
1 a service is subject to a legal monopoly
3the service is not in competition with other services
2 the legal monopoly not only excludes possible competition on the market; also, exclusive service provider is active in the relevant market
4if the service provider is active in another (geographical or product) market that is open to competition, cross-subsidisation has to be excluded
Tax benefits include inter alia...
Granting a grace period for tax payments
Tax payment by instalments
Reduction of tax rates
Existing state aid shall be notified to the AMC before 2 August 2018. New aid may be granted only upon approval of the AMC.
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